San Diego Mayor Todd Gloria announced on December 10, 2025, a sweeping rezoning initiative that could fundamentally reshape nearly 80% of the city's residential landscape. The "Neighborhood Homes for All of Us" plan aims to allow duplexes, cottages, townhomes, and bungalow courts in neighborhoods currently restricted to single-family homes, creating what may be the most significant opportunity for cash home buyers in San Diego since the passage of California's SB 9 in 2022.
For cash buyers and real estate investors, this represents a critical window to acquire properties at current single-family pricing before zoning changes unlock multi-unit development potential and drive values higher. With median home prices in San Diego at $1,050,000 as of December 2025 and only 13% of households able to afford the median home, the rezoning initiative addresses a market crying out for more attainable housing options.
The Scope: 80% of San Diego's Residential Land in Play
Currently, roughly 80% of San Diego's land zoned for housing is restricted to single-family homes, representing the most expensive and least attainable housing type in a city where the median home price stands at 8.7 times the median household income of $112,933. Mayor Gloria's initiative would transform this calculus by allowing "gentle density" across previously off-limits neighborhoods.
The plan specifically permits five housing types that are already common in established neighborhoods like Hillcrest, North Park, Golden Hill, South Park, and Normal Heights:
- Duplexes: Two-unit structures on lots currently zoned for single-family homes
- Cottages: Small, detached homes typically 600-1,200 square feet
- Townhomes: Attached row homes with individual ownership
- Bungalow courts: Multiple small homes arranged around a shared courtyard
- Row homes: Attached single-family homes sharing side walls
According to city officials, the rezoning won't apply uniformly across all single-family neighborhoods. Car-dependent areas like Carmel Valley and Rancho Bernardo are unlikely candidates, as are high-risk wildfire zones and neighborhoods lacking adequate jobs and educational opportunities. This targeted approach means the highest-value opportunities will concentrate in urban core neighborhoods already served by transit and amenities.
Timeline and Implementation: Your Window to Act
The implementation timeline creates a specific window for strategic acquisitions:
Spring/Summer 2026: City officials expect to release renderings of potential projects and begin exploring specific rezoning options. This phase will include extensive community engagement to determine what neighborhood-scale developments should look like.
Late 2026-2027: Following community input, the city will likely create new zoning designations or expand allowances in existing single-family zones. This regulatory process typically takes 12-18 months from proposal to adoption.
2027-2028: Properties in newly rezoned areas will begin reflecting development premiums in their valuations as builders and investors compete for acquisition opportunities.
For cash buyers, the 12-24 month window between now and formal zoning changes represents the sweet spot for acquisitions. Properties purchased at current single-family valuations in targeted neighborhoods like Hillcrest, North Park, and Golden Hill will carry embedded upside once multi-unit development becomes permitted by right. If you need to sell your property quickly before the market shifts, cash buyers can close in as little as 7 days.
Market Dynamics: Why Rezoning Drives Property Values Higher
Research on upzoning impacts consistently demonstrates that properties gain value when development restrictions are relaxed. When a property is rezoned from single-family to accommodate duplexes or multi-unit structures, that parcel typically increases in value as the market prices in the potential for larger, more lucrative development.
The magnitude of the value increase depends on several factors:
Scarcity vs. Abundance: When only a small geographic area is rezoned, it becomes especially appealing to developers, driving significant price premiums. However, when large areas receive new zoning simultaneously, the impact on individual property values moderates as development opportunities become more widely available.
Existing Property Characteristics: Lots with favorable dimensions, topography, and access command the highest premiums. In Hillcrest, North Park, and Golden Hill, properties on corners, with alley access, or measuring at least 5,000 square feet offer the most development flexibility.
Neighborhood Context: Areas already demonstrating housing demand, strong rental markets, and proximity to jobs and transit see the fastest value appreciation post-rezoning. North Park's median home prices rose 5.1% year-over-year to $943,000 in July 2025, outpacing citywide trends and signaling robust demand that would support multi-unit development.
Short-term impacts following zoning reform may include temporary price increases as buyers compete for newly valuable properties. However, studies show these increases moderate over time as new construction adds supply to the market.
Target Neighborhoods: Where to Focus Your Search
The rezoning initiative explicitly references neighborhoods that already contain the types of housing it aims to legalize citywide. These established urban communities offer the clearest blueprint for what's coming:
Hillcrest
With a median home price of $870,000 as of August 2025, Hillcrest offers a proven model of mixed housing types coexisting successfully. The neighborhood has demonstrated its ability to absorb higher-density development, with the City Council approving the Hillcrest Focused Plan Amendment in July 2024, which took effect December 1, 2024, allowing more mid-rise and high-rise buildings.
For cash buyers, Hillcrest presents opportunities to acquire older single-family homes at $756 per square foot, significantly below the citywide median, with the potential to redevelop into duplexes or cottage courts once the broader rezoning takes effect. Properties are spending an average of 30 days on market, up from 19 days last year, creating room for negotiation. If you've inherited property in San Diego in one of these neighborhoods, now may be the optimal time to sell before market dynamics shift.
North Park
North Park's median home prices reached $943,000 in July 2025, up 5.1% year-over-year, making it one of San Diego's strongest performing neighborhoods. The area's success following the 2016 North Park Community Plan update, which rezoned much of the neighborhood for higher density, demonstrates the value creation potential of zoning reform.
Properties in North Park spend just 21 days on market compared to 15 days last year, indicating sustained demand. The neighborhood's walkable urban fabric, restaurant scene, and transit access make it an ideal candidate for cottage courts and townhome developments that could command premium rents or sales prices.
Golden Hill
Golden Hill's market shows more volatility, with median prices ranging from $679,000 to $972,000 depending on property type and timing in 2025. This variation creates opportunities for savvy buyers to identify undervalued properties with strong development potential.
Properties in Golden Hill are spending 40 days on market compared to 17 days last year, suggesting a cooling that favors buyers. The neighborhood's proximity to downtown and Balboa Park, combined with relatively affordable entry points, positions it as a strong candidate for value-add multi-unit conversions. Many of these older homes with deferred maintenance may also be probate properties that heirs are eager to liquidate quickly for cash.
The SB 9 Foundation: Current Law Already Enables Multi-Unit Development
Mayor Gloria's initiative builds on existing California law that already permits multi-unit development on single-family lots. Senate Bill 9, which took effect January 1, 2022, allows homeowners to split their lots in two and build up to two units on each resulting parcel, creating potential for four units total.
After a slow start, SB 9 is gaining traction in San Diego. The law provides two pathways:
Duplex Development: Convert a single-family home to a duplex or add another single-family home to the lot without requiring a lot split. San Diego allows up to two ADUs on SB 9 projects that don't include lot splits.
Lot Splits: Divide the property into two roughly equal lots of at least 1,200 square feet each. On subdivided lots, the City of San Diego permits two units per lot, for a total of four units across both lots.
However, San Diego imposed restrictions that limit SB 9's appeal. An ordinance approved in February 2022 prohibits homeowners who split their lots under SB 9 from using any of the city's ADU incentives, reducing the total development potential compared to other California cities.
The "Neighborhood Homes for All of Us" initiative aims to go beyond SB 9 by creating zoning that permits multi-unit development by right, without the lot split restrictions and ADU limitations that currently constrain development.
Financial Considerations: Costs and Returns
Understanding the financial dynamics of multi-unit conversion is essential for cash buyers evaluating acquisition opportunities:
Acquisition Costs
Target neighborhoods show the following median prices as of 2025:
- Hillcrest: $870,000 ($756/sq ft)
- North Park: $943,000 ($800/sq ft)
- Golden Hill: $679,000-$972,000 (varies by property type)
Cash buyers benefit from stronger negotiating positions, particularly in Golden Hill where properties are spending 40 days on market, well above the citywide average.
Development Costs
For fiscal year 2025/26, San Diego County charges for duplex permits: $2,221 + $0.343/sq ft for plan review fees, and $2,423 + $0.211/sq ft for permit fees. Total permit and fee costs for custom homes typically range between $28,000 to $45,000, including school fees, traffic impact fees, and other charges.
Construction costs in San Diego have increased approximately 37% from January 2021 to January 2024. For ADUs, which provide a proxy for small-scale development costs, turn-key detached units run $375-$600+ per square foot, or $200,000-$450,000+ total.
For a duplex conversion or new duplex construction on a standard 5,000-square-foot lot, budget:
- Permits and fees: $30,000-$45,000
- Construction costs: $400-$600/sq ft
- Soft costs (architecture, engineering, financing): 15-20% of hard costs
A 2,400-square-foot duplex (two 1,200-square-foot units) would cost approximately $960,000-$1,440,000 to build, plus land acquisition and soft costs.
Return Potential
With median home prices at $1,050,000 for single-family homes and $660,000 for condos in San Diego, a two-unit duplex could generate sales revenue of $1,320,000-$2,100,000 depending on unit size and finishes.
For rental strategies, San Diego's rental market remains strong despite affordability challenges. A 1,200-square-foot two-bedroom unit in Hillcrest or North Park typically rents for $2,800-$3,500/month, generating $67,200-$84,000 in annual gross rents for a duplex before expenses.
Opposition and Political Dynamics
Mayor Gloria's rezoning initiative doesn't operate in a vacuum. The 2023 proposal by the San Diego City Planning Department was withdrawn amid fierce opposition from homeowner groups, and the current iteration faces similar headwinds.
Neighbors for a Better San Diego, a grassroots organization formed in 2021 with more than 3,000 email subscribers, has opposed most efforts to build more housing in the area, including zoning changes and ADUs. The group demanded an immediate one-year moratorium on bonus ADUs and has filed lawsuits against the city over sustainable development areas, arguing officials failed to properly analyze impacts on air quality, noise, traffic, aesthetics, and wildfire risk.
Geoff Hueter of Neighbors for a Better San Diego acknowledged merit in the proposal but emphasized the importance of matching housing scale to existing single-family homes, signaling that opposition will focus on design standards and neighborhood character rather than blanket rejection.
This political dynamic creates both risk and opportunity for cash buyers. While organized opposition could delay or scale back the rezoning initiative, the underlying housing affordability crisis in San Diego is severe enough that some form of zoning reform appears inevitable. The city's 8.7x price-to-income ratio, with only 13% of households able to afford the median home, creates political pressure that favors increasing housing supply.
Cash Buyer Strategy: How to Position for Success
Savvy cash buyers should employ a multi-phase strategy to capitalize on the rezoning opportunity:
Phase 1: Immediate Acquisition (Now - Spring 2026)
Focus on properties in Hillcrest, North Park, and Golden Hill that meet these criteria:
- Lot size: 5,000+ square feet (allows for lot split under SB 9 or future duplex/cottage court development)
- Corner lots or alley access (maximizes development flexibility)
- Older homes with deferred maintenance (lower acquisition cost, higher redevelopment justification)
- Locations within walking distance of transit, restaurants, and employment centers
Current market conditions favor buyers, with properties in Hillcrest spending 30 days on market and Golden Hill at 40 days, creating negotiation leverage.
Phase 2: Hold and Monitor (Spring 2026 - Late 2027)
As the city releases renderings and explores rezoning options, track which neighborhoods receive the most favorable zoning designations. Properties in areas designated for by-right multi-unit development will see immediate value appreciation once ordinances pass.
During this phase, consider:
- Participating in city engagement sessions to understand proposed standards
- Hiring architects to create conceptual plans for future development
- Building relationships with contractors and lenders who specialize in multi-unit conversions
- Monitoring comparable sales to track value appreciation as zoning changes approach
Phase 3: Development or Sale (2027-2028+)
Once zoning changes take effect, execute one of two strategies:
Development Strategy: Pursue duplex conversion, cottage court development, or lot split with new construction. This requires higher capital commitments ($1-2 million total for most projects) but captures the full value creation potential.
Merchant Builder Strategy: Sell to builders or developers who will pay premiums for entitled or entitlement-ready properties. This requires less capital and expertise but captures only a portion of the total value creation.
First-Time Homebuyer Angle: New Market Segment
Mayor Gloria specifically positioned the initiative as creating "a new slat on the housing ladder" for first-time homebuyers. In a city where only 13% of households can afford the median $1,050,000 home, smaller-format housing at lower price points addresses a massive unmet need.
The San Diego Housing Commission offers first-time homebuyer programs with income limits at 120% of Area Median Income (approximately $152,000 for a family of four in 2025). Eligible buyers can access:
- Low-Income Program: Up to 19% of purchase price in deferred-payment loans plus $10,000 closing cost grant
- Middle-Income Program: $40,000 down payment assistance plus $10,000 closing cost grant
These programs require buyers to contribute just 3% of the purchase price, making a $660,000 condo or cottage potentially accessible to households earning $100,000-$150,000.
For cash buyers developing cottage courts or duplexes for sale rather than rent, targeting this first-time buyer segment with units priced at $550,000-$750,000 taps into strong demand while still delivering attractive margins on projects with land acquisition costs of $800,000-$1,000,000.
Risks and Considerations
While the rezoning initiative presents compelling opportunities, cash buyers should weigh several risks:
Political Risk: The 2023 rezoning proposal was withdrawn amid opposition, and the current initiative faces similar headwinds from homeowner groups. Changes to the plan could limit which neighborhoods receive new zoning or impose design standards that increase development costs.
Timeline Risk: The spring/summer 2026 timeline for renderings and rezoning exploration could slip due to community engagement processes, environmental review, or political considerations. Properties acquired for rezoning upside may take longer than anticipated to realize value.
Construction Cost Risk: San Diego construction costs increased 37% from January 2021 to January 2024. Further increases could compress development margins and make projects pencil poorly even with favorable zoning.
Market Risk: The initiative aims to address affordability by increasing supply. If successful at scale, the resulting increase in housing units could moderate price appreciation or even reduce values in some submarkets, particularly if new construction significantly exceeds demand.
Regulatory Risk: San Diego's restrictive approach to SB 9 implementation, including the prohibition on ADU incentives for lot-split properties, suggests the city may impose similar constraints on the new rezoning that limit development potential.
Conclusion: A Generational Opportunity with a Closing Window
Mayor Todd Gloria's "Neighborhood Homes for All of Us" initiative represents the most significant shift in San Diego residential zoning in decades. By opening 80% of the city's residential land to multi-unit development, the plan creates a narrow but valuable window for cash buyers to acquire properties at current single-family valuations before zoning changes unlock higher-density potential.
The neighborhoods explicitly referenced in the initiative - Hillcrest, North Park, Golden Hill, South Park, and Normal Heights - offer the clearest opportunities, with existing patterns of mixed housing types, strong rental demand, and proximity to urban amenities that support multi-unit development.
For cash buyers, the strategic approach involves acquiring well-positioned properties now, holding through the 12-24 month rezoning process while monitoring city proposals, and then either developing multi-unit projects or selling to builders at premium prices once new zoning takes effect.
The window is narrow - likely 12-24 months before renderings, community engagement, and formal rezoning proposals begin driving values higher. Properties that meet development criteria (5,000+ square foot lots, corner locations, alley access) in target neighborhoods represent the highest-probability opportunities.
While political opposition, timeline uncertainty, and construction cost inflation pose risks, the underlying affordability crisis in San Diego is severe enough that some form of zoning reform appears inevitable. Cash buyers who position now, before the market fully prices in the rezoning potential, stand to benefit from what may be a generational shift in how San Diego approaches residential development.
Ready to explore rezoning opportunities in Hillcrest, North Park, and Golden Hill? Contact us today for a confidential consultation on cash buyer strategies for San Diego's evolving zoning landscape. We specialize in identifying properties with development potential and can help you navigate the complex intersection of acquisition, entitlement, and value creation in San Diego's most dynamic neighborhoods.
Frequently Asked Questions
What is Mayor Gloria's 'Neighborhood Homes for All of Us' rezoning plan?
The initiative, announced December 10, 2025, aims to rezone nearly 80% of San Diego's single-family neighborhoods to allow duplexes, cottages, townhomes, bungalow courts, and row homes. The plan targets spring/summer 2026 for releasing renderings and exploring specific rezoning options, with the goal of creating more attainable housing in neighborhoods like Hillcrest, North Park, and Golden Hill that already contain these housing types. The rezoning won't apply to car-dependent areas like Carmel Valley and Rancho Bernardo, nor to high-risk wildfire zones.
How does rezoning increase property values for cash buyers?
When a property is rezoned from single-family to multi-unit, the market prices in the potential for larger, more lucrative development, typically increasing property values. The magnitude depends on scarcity (small areas rezoned see higher premiums than large areas), property characteristics (lot size, topography, access), and neighborhood context (demand, rental markets, proximity to transit and jobs). In neighborhoods like North Park, where median prices rose 5.1% year-over-year to $943,000, strong demand signals ability to support multi-unit development and capture value from rezoning.
Which San Diego neighborhoods offer the best rezoning opportunities?
The initiative specifically references Hillcrest ($870,000 median, $756/sq ft), North Park ($943,000 median, $800/sq ft), and Golden Hill ($679,000-$972,000 median) as models containing the housing types it aims to legalize citywide. These neighborhoods offer proven mixed-use patterns, strong rental demand, and urban amenities. Focus on properties with 5,000+ square foot lots, corner locations, or alley access in these areas. Properties in Hillcrest spend 30 days on market and Golden Hill 40 days, creating negotiation leverage for cash buyers.
What does it cost to convert a single-family home to a duplex in San Diego?
For fiscal year 2025/26, San Diego County charges for duplex permits: $2,221 + $0.343/sq ft for plan review and $2,423 + $0.211/sq ft for permit fees. Total permit and fee costs typically range $28,000-$45,000. Construction costs run $400-$600/sq ft after a 37% increase from January 2021 to January 2024. For a 2,400-square-foot duplex (two 1,200-square-foot units), expect total development costs of $960,000-$1,440,000 plus land acquisition and 15-20% soft costs for architecture, engineering, and financing.
How does SB 9 relate to Mayor Gloria's rezoning initiative?
California's SB 9, effective January 1, 2022, already allows homeowners to split lots in two and build up to two units on each parcel (four units total). However, San Diego imposed restrictions in February 2022 that prohibit homeowners who split lots under SB 9 from using ADU incentives, limiting development potential. Mayor Gloria's 'Neighborhood Homes for All of Us' aims to go beyond SB 9 by creating zoning that permits multi-unit development by right without lot split restrictions, though the city may impose similar limitations based on its restrictive SB 9 implementation.
What is the timeline for the rezoning to take effect?
Spring/Summer 2026: City officials expect to release renderings and begin exploring rezoning options with community engagement. Late 2026-2027: Following community input, the city will likely create new zoning designations, a regulatory process typically taking 12-18 months from proposal to adoption. 2027-2028: Properties in newly rezoned areas will begin reflecting development premiums as builders compete for acquisitions. This creates a 12-24 month window for cash buyers to acquire properties at current single-family valuations before zoning changes drive values higher.
Who opposes the rezoning plan and what are the risks?
Neighbors for a Better San Diego, a grassroots organization with 3,000+ email subscribers formed in 2021, has opposed zoning changes and ADUs, demanding ADU moratoriums and filing lawsuits over development impacts. The group's opposition focuses on matching housing scale to existing homes rather than blanket rejection. A 2023 rezoning proposal was withdrawn amid fierce opposition. Risks include political changes limiting which neighborhoods receive new zoning, timeline delays from community engagement and environmental review, and design standards that increase development costs.
What rental income can a duplex generate in these neighborhoods?
A 1,200-square-foot two-bedroom unit in Hillcrest or North Park typically rents for $2,800-$3,500/month. A duplex would generate $67,200-$84,000 in annual gross rents before expenses. With San Diego's median home price at $1,050,000 for single-family homes and only 13% of households able to afford that price, rental demand remains strong despite affordability challenges. For sale strategies, a two-unit duplex could generate $1,320,000-$2,100,000 in sales revenue depending on unit size and finishes.
Can first-time homebuyers afford cottages or smaller units from this rezoning?
Mayor Gloria positioned the initiative as creating 'a new slat on the housing ladder' for first-time homebuyers. The San Diego Housing Commission offers programs for buyers earning up to 120% of Area Median Income (approximately $152,000 for a family of four in 2025). Low-Income Program provides up to 19% of purchase price in deferred loans plus $10,000 closing costs. Middle-Income Program offers $40,000 down payment assistance plus $10,000 closing costs. These programs require just 3% buyer contribution, making $550,000-$750,000 cottages accessible to households earning $100,000-$150,000.
What property characteristics should cash buyers target for rezoning opportunities?
Focus on: (1) Lot size of 5,000+ square feet allowing lot splits under SB 9 or future duplex/cottage court development, (2) Corner lots or alley access maximizing development flexibility, (3) Older homes with deferred maintenance offering lower acquisition costs and higher redevelopment justification, (4) Locations within walking distance of transit, restaurants, and employment centers in Hillcrest, North Park, or Golden Hill. Current market conditions with properties spending 30-40 days on market in target neighborhoods create negotiation leverage for cash buyers to acquire below asking price.
References and Citations
- San Diego Union-Tribune. "How to make San Diego more affordable? Mayor Gloria is betting on this kind of housing." Accessed December 15, 2025. https://www.sandiegouniontribune.com/2025/12/10/how-to-make-san-diego-more-affordable-mayor-gloria-is-betting-on-this-kind-of-housing/
- KPBS Public Media. "Mayor Gloria announces effort to allow townhomes in San Diego's single-family neighborhoods." Accessed December 15, 2025. https://www.kpbs.org/news/living/2025/12/10/mayor-gloria-announces-effort-to-allow-townhomes-in-san-diegos-single-family-neighborhoods
- Luxury SoCal Realty. "San Diego Real Estate Market." Accessed December 15, 2025. https://www.luxurysocalrealty.com/blog/san-diego-real-estate-market/
- Voice of San Diego. "Wannabe Homeowners vs. Reality." Accessed December 15, 2025. https://voiceofsandiego.org/2025/12/05/wannabe-homeowners-vs-reality/
- Redfin. "North Park Housing Market." Accessed December 15, 2025. https://www.redfin.com/neighborhood/1924/CA/San-Diego/North-Park/housing-market
- Redfin. "Hillcrest Housing Market." Accessed December 15, 2025. https://www.redfin.com/neighborhood/1262/CA/San-Diego/Hillcrest/housing-market
- Batch Leads. "Does Rezoning Increase Property Value." Accessed December 15, 2025. https://batchleads.io/blog/does-rezoning-increase-property-value
- Steadily. "Duplex Conversion Laws & Regulations in San Diego." Accessed December 15, 2025. https://www.steadily.com/blog/duplex-conversion-laws-regulations-san-diego
- City of San Diego. "Information Bulletin 409." Accessed December 15, 2025. https://www.sandiego.gov/development-services/forms-publications/information-bulletins/409
- San Diego County Planning & Development Services. "PDS 613." Accessed December 15, 2025. https://www.sandiegocounty.gov/pds/docs/pds613.pdf
- Better Place Design Build. "ADU Cost San Diego." Accessed December 15, 2025. https://betterplacedesignbuild.com/blog/adu-cost-san-diego/
- Times of San Diego. "Grassroots Group Fighting Developer-Driven Densification." Accessed December 15, 2025. https://timesofsandiego.com/politics/2025/07/02/grassroots-group-fighting-developer-driven-densification/
- San Diego Housing Commission. "First-Time Homebuyers." Accessed December 15, 2025. https://sdhc.org/housing-opportunities/first-time-homebuyers/
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